Wednesday, October 8, 2014
Cloud-Based Services in Supply Chain Management
From the KL reading case, we can tell that the real-time value network plays a significant role in achieving a more efficient supply chain management. In forming the real-time value network, we heavily rely on the cloud-based computing technology, which is defined as the shared software and information that users access via the web(1)—the trend permeated most software sectors as users demand faster implementation times, lower upfront investments, and less resources-intensive ways to get the programs that they need to run their business.
As the report ‘Supply Chain and the Future of Applications’ said, “the cloud can enhance end-to-end supply chain management, outlining the roadmap ahead for the cloud—enabled business and highlighting how companies can improve visibility and connectivity at a rate quicker than more traditional methods such as EDI and enterprise software systems.”(2)
To start application of cloud-computing, we have to choose the appropriate areas for adopting the technology. According to an article, the Sales & Operation Planning (S&OP), Transportation Management Systems (TMS), Spare Parts Management and Store Shelf Optimization are the four supply chain strategies that are the most cloud-friendly and have the greatest potential to deliver the network effect throughout a supply chain. (3) In general, they have to be the data-relating areas. Here is a picture from the article showing the chosen of certain operation parts.
Source: SCM world
Then, as mentioned in the article, the system that cloud-computing relied on is the ERP systems in place, as they provide the system of record corporate-wide. Over half of the users are using the systems such as SAP ERP followed by Oracle, especially for the transportation systems and warehouse management systems.
The utilization of cloud-based services leads to both financial and operational benefits. It can lower cost in contrast to on-premises infrastructure cost, supply chain visibility, platform scalability and flexibility through supply chain partner’s collaboration. (4) Its main advantage is the simplification. Cloud eliminates the compatibility problem using same platform access and provides easy connection to every part of supply chain, enabling information collaboration between partners in one supply chain system, so that we can eliminate the system-incompatibility among different countries.
In addition, its visibility can provide timely connectivity along multiple supply chain participants, showing the real-time visibility of shipments and improve logistics tracking.
The accuracy of data will get improved as well. Companies are able to adjust their capacity automatically according to their needs and scale their computing power depending on demand fluctuations by using the cloud-based technology.
There are limitations of cloud-based services for sure. Since the cloud storage and resources are managed centrally, there could be network congestions and chances to increment in latencies due to the higher demand of a particular service.
In general, the benefits still overweights the limitations from the long-run perspective. It has become a main-stream trend to utilize the cloud-based services, and experts are improving the technology constantly.
(1). How can we manage to attain the security in internet information-delivering?
(2). What back-up plans should we consider when encountering a technical breakdown?